Self-Assessment Quiz

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Chapter 11

Self-Assessment Quiz

This activity contains 10 questions.

Under the needs approach of determining the amount of life insurance to purchase, one consideration is providing income to the surviving spouse and children during the one- or two-year period following the breadwinner’s death. This period is called the

dependency period. blackout period.readjustment period. accumulation period.

Which of the following statements is (are) true with respect to the human life value approach?

The human life value approach considers all sources of income that the family receives.
The human life value approach does not consider the time value of money--future cash flows are not discounted back to present value.

II onlyboth I and III onlyneither I nor II

Bob and Tonya are supporting their children, ages 4 and 2. Bob’s father is also financially dependent upon Bob and Tonya. This type of family is called a(n)

blended family. traditional family. sandwiched family.single-parent family.

From an economic perspective, “premature death” is defined as

death before both parents have died. death before reaching life expectancy.death before reaching age 65.death with outstanding financial obligations.

Some term insurance policies permit the policyowner to exchange the policy for a cash value policy without having to demonstrate insurability. Such term insurance policies are described as

convertible. ordinary. renewable. decreasing.

All of the following are characteristics of variable life insurance EXCEPT

flexible premium payments. cash values are not guaranteed. the policyowner selects where the cash value is invested.the cash value and death benefit vary with investment performance.

Lynn, age 32, would like to purchase permanent life insurance. She is concerned that premiums may become a burden after she retires. Given her coverage preferences, which of the following life insurance policies is the best policy for Lynn to purchase?

limited-payment whole life insurance ordinary whole life insurance endowment life insurance renewable term insurance

Which of the following statements is (are) true with respect to universal life insurance?

Universal life insurance provides premium payment flexibility for the policyowner.
Universal life insurance permits the policyowner to select where the cash value is invested.

neither I nor IIboth I and III onlyII only

All of the following life insurance policies develop a cash value EXCEPT

term life insurance. whole life insurance. universal life insurance. variable life insurance.

One type of life insurance is a nonparticipating whole life policy in which cash values are based on the insurer's present mortality, investment, and expense experience. An accumulation account is used to reflect the cash value of the policy, and a fixed death benefit and maximum premium level are stated at the time the policy is issued. This type of life insurance is called

current assumption whole life. indeterminate-premium whole life. modified life insurance. universal life insurance.

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Self-Assessment Quiz

Under the needs approach of determining the amount of life insurance to purchase, one consideration is providing income to the surviving spouse and children during the one- or two-year period following the breadwinner’s death. This period is called the

Bob and Tonya are supporting their children, ages 4 and 2. Bob’s father is also financially dependent upon Bob and Tonya. This type of family is called a(n)

From an economic perspective, “premature death” is defined as

Some term insurance policies permit the policyowner to exchange the policy for a cash value policy without having to demonstrate insurability. Such term insurance policies are described as

All of the following are characteristics of variable life insurance EXCEPT

Lynn, age 32, would like to purchase permanent life insurance. She is concerned that premiums may become a burden after she retires. Given her coverage preferences, which of the following life insurance policies is the best policy for Lynn to purchase?

Which of the following statements is (are) true with respect to universal life insurance? Universal life insurance provides premium payment flexibility for the policyowner. Universal life insurance permits the policyowner to select where the cash value is invested.

All of the following life insurance policies develop a cash value EXCEPT

Which of the following statements is (are) true with respect to universal life insurance?

Universal life insurance provides premium payment flexibility for the policyowner.
Universal life insurance permits the policyowner to select where the cash value is invested.